PLAN N MANAGE INSURANCE

INSURANCE - BASICS

Dated 11.10.2017 : In a recent judgement in a case of insurance claim on account of theft of a vehicle , Supreme Court said that claim cannot be rejected on technical ground of delay in submission of claim , if claimant explains satisfactorily reason for such delay . Supreme Court bench opined that such rejection purely on technical ground will result in loss of confidence in insurance industry . It also stated " It will not be fair and reasonable to reject genuine claims which already been verified and found correct by investigators "

The case pertained to appeal by Mr Om Prakash against Reliance General Insurance co Ltd and court ordered to pay the claim amount already approved by the investigator .

Insuranceis a form ofrisk managementprimarily used tohedgeagainst the risk of a contingent, uncertain loss during specific time period agreed . It is an expense required to protect future and have peace of mind today . It is a risk management device used as a part of prudent financial planning , investment vehicle and tax saver . An insurer is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy. The amount of moneyto be charged for a certain amount of insurance coverage is called the premium. The transaction involves the insurer paying or agreeing to pay premium at the agreed interval to the insurer in exchange for the insurer's promise to compensate the insured an amount agreed up on or to make good the loss fully or partially in the case of a financial loss. The insured receives insurance policy, which details the conditions and circumstances under which the insured will be financially compensated. The insurance policies are issued for specific time periods during which period only risks are covered . Policies will have an option to renew them on maturity on payment of fresh premium . There are various insurance companies specializing in particular types of risk coverage . In India , insurance companies are regulated by Insurance Regulatory and Development Authority of India ( Website https://www.irda.gov.in/ ) . There are separate types of policies available for each type or group of risks . Some of the popular types of policies are :

Now you can have all your insurance policies in demat way , by having e-Insurance account and it eliminates burden of carrying and safeguarding physical policies . To know more about it , CLICK HERE

BASICS OF INSURANCE

LIFE INSURANCE

Life insurance provides a monetary benefit to a nominee or legal heirs in case of death of policy holder during the period of policy . Though it is called Life Insurance , it actually covers financial loss of the family on the death of its breadwinner who is insured . The premium for an insured amount primarily depends up on the age of policy holder at the time of taking up the insurer . There are policies which pay an assured maturity amount at the end of the policy period or in between at specific intervals to the policy holder if death does not take place during the period . To encourage people to take insurance policies , Government of India allows certain benefits to the policy holders in form income tax exemption . In India , there are both public sector and private sector life insurers . As life insurer covers the risks for a long period , one has to be diligent about the h Often policies also cover Life insurance policies often allow the option of having the proceeds paid to the beneficiary either in a lump sum cash payment or anannuity.

HEALTH INSURANCE Health insurance policies cover medical expenses in general and hospitalization in particular . Insurance policies may cover certain percentage of actual expenses or a fixed amount agreed on onset of a particular disease or hospitalization . Premiums are collected annually or in regular intervals . Some insurers will pay directly to the hospitals under the policies promising “ Cashless “ cover and hence it is suffice for the insured to show the insurance card issued by the insurer for getting treatment . Premium paid under health insurance are tax exempted under section 80D of Income Tax act of India . For further details visit page HEALTH INSURANCE

HOUSEHOLDERS’ POLICY Householders policies generally cover both the houses you own and contents in the house as well as accidents that may take place . The risks covered generally are theft , burglary , damages caused to house and its content for many reasons like fire n accidents etc .

VEHICLE INSURANCE

Vehicle insurance or Motor insurance covers the insured against damage to the vehicle insured and pays for third party liability determined by courts against the insured as owner of the vehicle . The third party insurance is a must as per law .

TRAVEL INSURANCE Travel insurance policies cover risks involved while travelling . Bormal policies cover the travel within the country and special policies are to be obtained for overseas travel . these policies are useful especially for those who travel often . Individual policies can also be obtained for a single specific overseas travel . Normally policies cover accidents during travel , medical emergencies while travel , baggage theft , loss of passport , purse etc or delays in air travel .

GENERAL TIPS FOR MANAGING INSURANCE

Insurance is a necessary expenditure . It gives you peace of mind. Hence insure all the risks you anticipate in your life.

Correctly assess the replacement value of the risks you fear and insure for full amount .

Do not over insure or under insure the value . If you over insure , you will get what is actual value of loss less reductions mentioned in the policy and you would have paid extra premium . . If you under insure , there will be substantial reduction on your claim .

Give factual position of your self and properties to be insured . Any wrong information may cause delay and dishonor of your claim .

Check the credentials of the insurance agent before you entertain him / her . Insurance agents may mis- sell policies and beware of the fact they work for a commission . Hence there may be a tendency to rush you to a particular policy or company . Take your time to decide.

First decide what is your requirement of insurance . Discuss with the insurance agent you trust . Go on line and find products suited for you from various companies. View the reputation of insurance company in settling the claims . Get quotes from the companies from whom you are ready to buy . Compare the premiums , terms and conditions . Finally you decide .

There are portals available for exclusively comparing insurance products . Utilise them . But remember they may compare only few products from few companies . Hence you may visit various portals of insurance companies themselves for wider choice . Even if you are dealing with your insurance agent direct , information you gather on line will help you to get reduction of premium from the agent .

Time spent on understanding insurance policies you want to buy is worth it as you are buying peace of mind for a long time .

Dairaise the Due dates and pay before the date to avoid penalties / risks . You can give instruction to your banker to make payment before due date or you can give mandate to insurance company to make ECS Claim .

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